Quote:
Originally Posted by redpoint5
Yeah, I'm simply going to pit 3 companies against each other until one of them says this is their final best offer.
I think keeping money upfront is probably a wiser choice than paying down the interest. That money saved can go into the stock market, which is still discounted. A cash out refi could even make sense to throw more money into the stock market while deducting the interest payments on taxes.
This all gets very confusing trying to weigh paying points, vs simple origination fee, vs no upfront loan cost (increased rate). I'm inclined to believe paying as little upfront is the best strategy since any money saved can earn ~7% return in the market, interest payments are tax deductible, and the banks carry greater risk with the higher loan to value ratios.
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I got multiple quotes from 5 banks and this was the best. The problem with bidding is that rates change twice a day (9 am and 3 pm EST).
As this is a cash-out loan I'm not actually paying money out of pocket for the point (locked this morning at 0.866 pts) or other origination fees. The closing costs are just subtracted from the cash-out.
I disagree that banks carry the risk at high loan to value ratios. The only way they carry risk is if loan goes into default and the buyer doesn't have enough assets to cover their losses. If I was to default on this loan, the bank would just sue me to recover their loss.